Biggest first-half slump since 1970s raises questions about dollar’s future. The US dollar has plunged more than 10% this year, marking its steepest first-half decline since the 1970s, and raising alarms about the currency’s long-term strength and global dominance.
Several factors have contributed to the crash, including:
Cooling US inflation, reducing the pressure on the Federal Reserve to maintain high interest rates.
Rising confidence in alternative currencies such as the euro, yen, and even the Chinese yuan.
Geopolitical realignments and de-dollarisation efforts by major economies like BRICS nations.
Increased investor risk appetite, pushing capital flows towards emerging markets and equities.
With the dollar now at multi-year lows, economists say the greenback’s next move will depend heavily on Fed policy, global macro trends, and market confidence in the US economy.
While some analysts expect a technical rebound in the short term, others warn that the dollar may continue to trend lower, especially if the Fed pivots to rate cuts and other economies outperform the US.
Investors are advised to diversify currency exposure, monitor upcoming US economic data, and stay alert for policy shifts that could trigger further volatility.
